Zain confirms talks to sell stake in African assets

Kuwait City, August 31, 2009

Kuwait's largest telecoms company, Zain, whose shareholders voted to lift a cap restricting ownership on Monday, is in talks to sell a stake in its African operations, its chief executive said.

Zain is in talks with a number of partners concerning its African assets and "all scenarios are possible", Saad Al-Barrak said after an extraordinary shareholder meeting.

"There is a demand (for) African assets beyond what we expected. There are a number of partners interested and we are still in preliminary talks," he told reporters.

Al-Barrak was quoted by a local newspaper earlier this month as saying Zain was in talks with three major telecoms firms, including one from India.

Asked if this report is correct, he said: "I think that's correct to a far degree." He declined to name any firm.

Indian company Reliance Communications has started talks to buy Zain's African operations, two banking sources told Reuters earlier this month.

Zain, in the middle of a strategic review and which is being advised by UBS, said on July 8 it was reviewing a possible sale of African operations.

Its shareholders approved to remove a cap on share ownership at an extraordinary meeting on Monday, amid speculation this would pave the way for selling a large stake in the Kuwaiti group to a foreign investor.

Al-Barrak said Zain Group was not in talks to sell a stake in the entire company, while chairman Assad Al-Banwan told shareholders on Monday the company had not received any offers.

"We as Zain company have no requests to buy Zain, I didn't get anything official," Banwan said.

Zain's shares have risen more than 20 percent since the start of August when talk of a sale first came to light. Its stock closed flat on Monday at 1.52 dinars. - Reuters